Where it states that lease deposits must convey to the buyer & what a buyer can do when a seller pushes back? It happened to us recently at Land Sale TX when purchasing a property just outside of Lockhart, TX – did we end up in court? ⚖️
When you’re buying a piece of land in Texas, many times there will be a home on the property and it will be rented out to a renter. So, generally speaking, there’s going to be a lease deposit associated with that lease. Well, what happens when the owner sells the property to you? We recently had this come up where we were purchasing a large piece of land and it had six rental properties on the land. At closing, the seller didn’t think that he should have to transfer the lease deposits to us as the buyer because he didn’t receive those from the seller, which was actually his fault when he purchased the property. Those should have been transferred to him. He was firm on this. He absolutely was not going to let the price be decreased for those lease deposits because he actually never gathered those from the seller when he purchased the property.
Per the Texas Property Code Section 92.102, lease deposits must convey to the buyer because when those tenants leave, if they leave the property in good condition, how it was when they first started leasing the property, you are then required by law to give those lease deposits back to them. We went back and forth with this seller and he was firm. He didn’t think that he should have to pay for them. Now, we could have taken him to court. It was about $2,000, but you know, we’re negotiating a multi-million dollar land deal. Does it really make sense to take someone to court over $2,000. And, it’s interesting how money can blur people’s integrity. We just bit the bullet on this one. Instead of taking him to court, we actually came out of pocket to make sure that those renters were made whole because it’s the right thing to do.
Again, with the residential lease addendum, this is in addition to the TREC contract and if there’s ever a lease on a property, a residential lease, you have to attach this addendum. Because, in the addendum is where it states that the lease deposits shall be conveyed to the new buyer.
Feel free to reach out to us with questions or other topics you’d like to see covered.
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